Call it The Great Contradiction.

Georgia’s unemployment rate fell to a record low in September as the state’s economy added thousands of jobs and employers offered higher wages.

But many potential workers continued to stick to the sidelines and the size of the labor force shrank last month, the Georgia Department of Labor reported Thursday.

Usually, when jobs and raises are plentiful like now, the labor force expands. Economists are scrambling to explain why that is not happening.

The conflicting numbers suggest an economy that is expanding at a healthy clip but struggling to fill job openings, potentially dampening growth as COVID-19 continues to upend traditional hiring patterns.

Georgia has regained 521,000 of the 609,500 jobs lost in the early weeks of the pandemic, said Mark Butler, the state’s labor commissioner.

“This is excellent progress for Georgia, and it shows that the state’s economy is rapidly recovering,” Butler said.

But about 37,000 fewer people are now in Georgia’s labor force than before the pandemic and many companies have complained they cannot find the workers they need. On the other side of the ledger, employees have felt freer to leave jobs, what some have dubbed “The Great Resignation.”

The state’s unemployment rate slid to 3.2% in September from 3.5% the month before as the economy added 14,300 jobs last month, both good signs.

The unemployment rate, though, includes only working-age people who are jobless but searching for work.

In a bad sign, the overall size of the labor force shrank by 6,000 last month. That suggests more Georgians who did not have jobs also did not look for work.

A recent analysis by JP Morgan found the largest share of those on the sidelines are people with some financial cushion who can be selective. The second-largest share, roughly a quarter of the total, are people with coronavirus-related constraints — either health worries or child care problems, the study found.

Many parts of the economy are growing. Consumer spending in metro Atlanta is up 16% compared with early 2020, according to an economic tracker managed by researchers at Harvard.

Statewide, though, the Department of Labor lists about 300,000 job openings, nearly twice as many people as are officially unemployed.

The shortage of jobseekers is forcing many employers to compete for candidates, and the shortage seems most acute among lower-paid positions, especially in leisure and hospitality.

That is effectively raising the state’s minimum wage, which legally is just $7.25 an hour.

RaceTrac is hiring for 950 positions at 118 locations in Georgia. Pay starts at $11.25 an hour, according to Jill Van Pelt, vice president of human resources.

But prospective employees also appear to have become more selective beyond just pay.

About a month ago, Valerie Winrow quit a job with good benefits, good pay and a great boss. But that public relations work did not give her satisfaction.

“My job felt monotonous,” she said. “I could roll over in my pajamas and close my eyes and do my job and every day was the same.”

She quickly took another job as director of external affairs at the Town Center Community Improvement District in Kennesaw.

“What COVID taught us, what the pandemic taught us, that there comes a time in your life when you start to think about what is important,” she said. “At the end of the day, you want to have a sense of fulfillment.”

Relay Payments, a rapidly growing Atlanta-based company that provides digital payments for the logistics business, has surged to more than 100 employees and is hiring in a range of positions from software engineers to accountants, according to Amy Zimmerman, chief people officer.

“It is our biggest challenge,” she said. “It takes longer to fill roles because you want the good ones and the good ones are going to have five other offers.”

Growth in Atlanta’s tech sector, where remote work is common, was barely dented by the pandemic and offers talented people lots of choices, she said. “Salary is important, benefits are table stakes, but there are a million different places they can go.”

Companies doing in-person and hands-on work face similar challenges.

Carlotz, which sells used cars on consignment, is hiring up to 10 people for its new Lilburn dealership, including sales staff and auto technicians.

The company offers a bonus for employees who refer new hires, and it has boosted benefits and pay, said Liz Sanders, the company’s chief administrative officer. “We certainly recognize that it’s a tight labor market. There are a lot of options for folks these days.”

Nearly all sectors face the labor “shortage,” said Sheryl LaPlace, an Atlanta-based human resource consultant with Insperity, which provides administrative services to many kinds of small- and medium-sized businesses.

The companies that land the best candidates are seen as comfortable, welcoming places to work, then following through once someone takes the job, LaPlace said.

“You definitely want to make sure you are paying competitive rates,” she said. “But once someone is there, at some point they want to be doing the things they think are important.”

Hannah Evon working at home in Atlanta on Thursday, Oct. 21, 2021 after a 10-month-long search for her perfect job. (Jenni Girtman for The Atlanta Journal-Constitution)

Credit: Jenni Girtman

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Credit: Jenni Girtman

What was important to Hannah Evon of Atlanta was having a job where the work was satisfying, but not too stressful, where she felt challenged but valued. So she was willing to move from Memphis to Atlanta last year without a job — after all, her engineer husband was working.

After months of searching, she found what she wanted, starting a job this month as a writer for an insurance underwriting company.

The wait was worth it, she said. “They sent Ikea to my house to set up a swanky office space that I work at. And they bought me dinner and sent me flowers on my first day.”

But without the financial cushion of her husband’s paycheck, the job search would have ended differently.

“It was brutal to be unemployed for that long,” she said. “At month five, I was starting to panic. I was seriously considering a job that would have been soul-sucking work.”

Georgia unemployment rate

Pre-pandemic low: 3.3% (January, 2020)

Pre-pandemic high: 10.9% (November, 2009)

Pandemic high: 12.5% (April, 2020)

Lowest on record: 3.2% (September, 2021)

Georgia job growth

April: -8,800

May: 14,100

June: 40,300

July: 36,100

August: -5,000

September: 14,300

Average Sept., pre-pandemic: 1,300

Sources: Georgia Department of Labor, Bureau of Labor Statistics

Why people choose not to work

35%: financial cushion with unemployment benefits, stimulus, savings

25%: COVID fears, child care constraints

20%: early retirees

10%: immigration and visa issues

10%: rise in self-employment

Source: JP Morgan

Georgia employers posting more than 1,000 jobs

Amazon: 3,500

Piedmont Health Care: 3,000

Advantage Sales and Marketing: 2,600

Wellstar Health System: 2,200

Beech Valley Solutions: 1,700

Home Depot: 1,500

Walmart: 1,500

Anthem Blue Cross: 1,300

Salary range: $23,000 to $102,000

Salary average: $42,000

Sectors with most jobs added in September

Retail: 5,90

Wholesale: 2,100

Transportation and Warehousing: 1,800

Professional, Scientific, and Technical Services: 1,600

Accommodation and Food Services: 1,100

Source: Georgia Department of Labor